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Avoiding Holiday Credit Card Debt

When it comes to the holidays, buying gifts can be even more fun than receiving them. However, it can also lead to a downhill spiral of spending that will leave you making a New Year’s Resolution to stop eating.

Every year you plan to avoid the credit card fiasco, and even make a wholehearted attempt to purchase all of your holiday gifts with cash. If you are reading this article, chances are you ended up using your credit cards more than intended!

It is not uncommon to fall prey to over spending during the holidays. The thing to remember is that it can be avoided, and it can be rectified if it seems too late.

There are indeed some tried and true methods of fixing your holiday credit card slump that you can put into action right away. Here are some strategies to climb out from underneath the holiday credit card slump, and help you pay off those purchases quickly so you aren’t still paying for them by the time the holiday season rolls around again next year.

First of all, use introductory offers to your advantage. After the holidays many credit card companies release special introductory rates to entice new customers to apply for their cards.

If you can find one that offers 0% interest on balance transfers for a year, you’re in! You can transfer your holiday debt from the various cards that you used, and pay it off without hefty interest rates.

Another benefit of this technique is the fact that you will have a single payment even if you had used several credit cards for holiday shopping. Once you combine all of them on the new 0% balance transfer credit card, you’ve got a single, monthly payment!

This is the perfect time to close the other credit cards you have. After all, it is truly unnecessary to have more than one credit card per household.

If you are unable to find a 0% interest rate on balance transfers for twelve months, you might be able to find a six month introductory offer. This is still worth the time and effort to transfer your balances as you can work to pay them off before the six months is up, or at the end of the six months move the balance to a new card with a 0% balance transfer offer.

If you don’t qualify for a 0% interest introductory balance transfer offer, you could consider using the checks that often come with your credit cards. Sometimes you have to request them from your credit card company, if they are not initially included.

While the interest rate might not be zero, and it may not be any lower than the card that offers the credit card checks to you. If you have balances on several credit cards, writing a check to pay off each card means you would only have a single monthly payment.

In the long run, you would save immensely on interest and finance charges by having a single account. In addition, paying on a single account instead of three or four will help you pay off the outstanding balance much faster-and who doesn’t want that?

Next, it might be a good idea to request a lower rate. In some cases, credit card companies are able to lower your interest rate just because you’ve asked them to!

It certainly doesn’t hurt anything to pick up the phone and call your credit card company’s customer service line to request a lower interest rate. When you’ve gone overboard with your holiday spending, you can really save on the total amount you end up repaying just by having a lower interest rate.

Ideally, you will want a card that will allow you to move all of your other credit card balances onto, and at a 0% balance transfer rate. There are times when you can’t get approved for the best offers, or times when you just have more outstanding debt than the offer allows you to transfer.

If this happens to you, you might consider getting a new credit card that will allow you to transfer your entire debt from all of your other cards, and one that has a reasonable interest rate on the transferred balances, so that you can start making a single monthly payment rather than several. As you can see, there are ways to get out from under the packages, boxes, and bags of holiday debt that are drowning you.

Do some research on available offers and talk to your bank about lowering your credit rate today. After all, there is nothing better than starting a new year debt free.

Terry Daniels is an accomplished expert in personal finance. With 12 years of experience, he offers great advice to any small business merchant.

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Terry Daniels